Capitalism will never solve homelessness because capitalism needs homelessness in order to exist.

(A travelogue that turns into a polemical harangue.)

We drove to Colorado and flew to Los Angeles. Two trips in less than one month took us out of the Midwest for the first times in over three years. Although we saw and did many interesting things, what follows will not be some travelogue about how a couple beatniks explored America and ate snacks along the way. (Although there will be some of that.) Rather, this is about the ever-expanding homelessness crisis in this country and what it says about the decline of American capital.

The inspiration for this essay occurred in Denver. I had driven all day from Durango, Colorado, through two national forests and around more tight turns on cliffs in the rain than I’d care to count. We pulled into a gas station on the western edge of Denver, fueled up, and did a quick web search for food. There was a Japanese restaurant near the Colorado Rockies’ stadium and the prices were surprisingly cheap. Turns out, that’s because it’s a small plate restaurant, and that ten-dollar tofu dish that sounded so good is two bites for ten dollars, and we were about to embark on one of the most expensive meals of our marriage. Delicious. But not cheap.

We got off the highway and drove past the stadium, and then through a block-long homeless camp. Tents and people lined the street. We turned a corner, and with the tents still in the rearview mirror, the voice on the telephone informed us we had arrived at our destination. The extreme polarities of wealth coexisting within a few blocks were astounding. As we waited for our table, absurdly well-dressed people stepped out of cars worth more than our house and were swept inside by staff who knew their names and took their drink orders on the sidewalk, while just around the corner sat people with only a tent and some clothes, all of which the police might choose to put in a dumpster tomorrow. A few weeks later, as we left LAX in a rental car, we sat in traffic jams alongside underpasses filled with tents packed full of our fellow citizens who we try hard to forget are even there.  

The number of homeless persons in the USA really started expanding in the 1970s and has increased steadily ever since. This is not at all coincidentally also the era of neoliberal economics. The rust belt rusted, the pensioned and secure jobs of the postwar era steadily disappeared, corporate profits and wages stopped increasing in unison, and the social safety net that really got going during LBJ’s “War on Poverty” was almost completely dismantled. (In Johnson’s war in Vietnam and his war on poverty, both the Viet Cong and poverty prevailed. Not a great track record, Lyndon.) In recent years, rent has risen way beyond wages while work has become increasingly insecure and temporary. We have abandoned our fellow citizens and now casually drive past them on our way to a fine dining experience or a wedding in Pasadena. None of this is good and all of it has its roots in policy decisions that place generating shareholder value over taking care of other human beings.

On our trip to Colorado, I reread Marx’s 1844 Paris Manuscripts for the first time since college. When he wrote these, many of the insights we consider quintessentially “Marxist” did not exist yet. The emphasis in this earlier work is on the alienation of individuals rather than how a totalized system generates surplus value. A lot of his economics in these early writings are lifted straight from Adam Smith. Marx was still in the process of becoming Marx. I was particularly struck by this passage: “The demand for men necessarily governs the production of men, as of every other commodity. Should supply greatly exceed demand, a section of the workers sink into beggary or starvation.” Here Marx attributes homelessness to a seemingly inadvertent oversupply of humans, but in the first volume of Capital some twenty-three years later, he argues that those who have “sunk into beggary or starvation” are a structurally necessary industrial reserve army who need to exist for capitalist expansion to occur. Without desperate people begging and starving, capitalism can’t get going. You need to push the serfs off their land and set them on the streets of London before things get all Dickensian.

Full employment would make capitalist expansion impossible. If everyone is employed when new industries emerge, there will be no one to staff them. And since capital must expand every quarter without ceasing, there always need to be unemployed people ready to go at every instant. If capitalism is going to work, there always need to be quite a few people for whom it isn’t working, but could work if we need them. Luckily for the capitalists, there are “somehow” always unemployed people ready to go when they build a new factory or expand production. As Marx writes in Capital:

The question why this free laborer confronts him in the market, has no interest for the owner of money, who regards the labor-market as a branch of the general market for commodities. And for the present it interests us just as little. We cling to the fact theoretically, as he does practically. One thing, however, is clear—Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labor-power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older forms of social production.

Part of how capitalism, this new form of social production he was writing about, puts laborers on the streets goes something like this: When some new machine emerges that does the work of ten people, nine of them are laid off while one of them tends that new machine. This is usually not a problem for long. If businesses are expanding fast enough, new factories and stores are appearing all the time, selling more things to more people. Or a new invention comes along. No one made DVD players in the 1960s, but plenty of people do today. We create new needs and suddenly there are new professions. An expanding economy can reappropriate the people it casts off. Having people ready and waiting is necessary for this to work.

Homelessness is on the rise and that is a powerful sign that American capital has stalled. In Capital, Marx argues that some level of destitute and available persons are required for capitalism to function. But, harkening back to the Paris Manuscripts, the supply is getting out of control. More people have been kicked out of the economy than the economy can reappropriate in new ways.

Any number of homeless humans is unacceptable, but we have gone way beyond even what capital demands for an industrial reserve army. With no new industries or jobs, more and more people end up on the streets. Meaningful aid or work is unavailable. Production doesn’t expand and so they stay there, joined each day by more and more of their fellow forgotten citizens. The post-WWII boom that made the USA an economic behemoth of previously unseen proportions is drawing to a close, and the proof sleeps restlessly on our streets every night.